Three Different Routes to IT Staffing

General Motors CIO Ralph Szygenda runs a 100% outsourced IT shop. And although GM is in the middle of a 10-year contract with EDS, every major vendor in the world works inside the giant company.

Outsourcing enhances GM's flexibility, plus it helps the company move fast and stay on the leading edge of new technologies, Szygenda says.

"The outsourcing model let us change from a decentralized company to one of the most centralized IT organizations in the world, and the changes are showing up in the bottom line," he says.

Although GM uses thousands of outsourcers to do the "arms and legs" programming work, GM IT executives are still responsible for setting IT strategy, defining specifications and overseeing operations and programs run by outside service providers, Szygenda says.

Ford is taking an entirely different route to IT staffing by minimizing outsourcing and converting many of its current contract positions to full-time jobs, according to CIO Marv Adams. Ford began its migration away from contract workers last fall under an initiative dubbed Project Renaissance. Adams says Ford has hired nearly 500 new employees in the past year, bringing the total number of people in the IT department to 6,400, including contractors.

Kevin Prouty, an analyst at AMR Research Inc. in Boston, praises GM's decision to outsource application development while keeping the incubation of ideas in-house.

"While not perfect, GM has figured out what to outsource and what to keep in-house," he says.

Prouty says that Ford, on the other hand, has decided to bring its IT functions in-house to try to control as much of its infrastructure as possible.

Adams says Ford thinks it's critical to the operation of the company, as well as to the development of its vehicles, that it have a more significant role in the development of its IT strategy. The main reason Ford decided to bring its IT functions back in-house was so it wouldn't be so dependent on service providers and partners, he says. It also wants to build out its IT capability while eliminating the margin it often pays to outside providers.

DaimlerChrysler CIO Sue Unger says the automaker has about 4,000 people in its IT department, including contractors and employees. But vendors also have a role to play.

"We do a lot of partnering. . . . Sometimes it's a combination of our technology partners like IBM, i2, and hardware providers like Sun, and Microsoft," Unger says.

STAFFING STRATEGIES OF THE BIG THREE

GM

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Has 1,700 IT employees, plus more than 20,000 IT contract workers.

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Has outsourced 100% of IT operations under a 10-year contract with EDS and other vendors.

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In-house IT and business executives set strategy, define specifications and oversee operations.

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IT organization is highly centralized.

Ford

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Has 6,400 IT workers, including contractors.

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Key labor strategy is to migrate away from contract workers.

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Has hired nearly 500 IT employees in the past year.

DaimlerChrysler

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Has approximately 4,000 IT workers, including contractors.

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Partners extensively with IT vendors on key IT projects.

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Key IT strategy involves consolidating 76 global data centers into four massively scaled data centers.

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Copyright © 2002 IDG Communications, Inc.

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